China devalues the dollar and opens a Pandora's box for China.

China devalues the dollar and opens a Pandora's box for China.

China linking the Huan to the dollar was like putting the dollar on the gold standard. De-linking will cause a spike in dollar devaluation that translates into a similar increase in inflation that actually would be helpful at this time. But the longer-term effect could be greater because the market will now anticipate further dollar instability. In the past the dollar and the Huan linkage made both currencies stronger because the oldest and newest powerful currencies seemed indestructible together. Now China opens the possibility of an unstable Huan just as much as it opens the possibility of an unstable dollar. America may just re-invent the markets with new products that render the older products obsolete. But that would take time and China has 4000 years of experience in that area.


GE/MSNBC/PRAVDA/ Jim Cramer. Said buy at the market top, sell at the market bottom and then said by when the market pulls back, and the markets surged and refused to set a new low for GE/MSNBC/PRAVDA/ Jim Cramer to get their listeners back in. So far they have lost their listeners about 20% relative to their listeners just buying and holding. Cramer keeps pointing out every time Apple advances but Apple has been range bound for six months. The children who use Apple products have bought 98% of the music they want to buy since the IPOD zombie culture began and music sales are said to be falling just as the children's school grades are falling. Apple is soon going to report unfortunate news and a 25% Apple pull back is quite possible along with the entire industry which Cramer spouted about last year. As soon as Cramer followers lose about 15% Cramer has amnesia and says he got out of that sector months ago. Remember that natural gas ETF that lost his listeners 30% last year?

How does Cramer get away with his hapless advice? Well he claims he changed his mind that he does actually several times so that he can pick and chose which opinion he held. For instance if the market goes up Monday to a new high he is likely to say buy on Monday night. Then if the market drops Tuesday he says sell Tuesday night. Then if the market is up two months later he recalls he said buy on Monday. It is called selective amnesia. Only this last time when the market bottomed out he was too late and still did not say buy. Likewise at the April high he did not have time to say sell and have the option of selective amnesia.

Cramer knows he missed the bottom so he is now saying the stock market should retreat to try to get the market to go lower. He claims the market is near its new high now. Fat chance.

World Markets:
China exudes confidence in world economic expansion as indicated by their softening of the link of the Huan and the Dollar.

Many people are now running out of the maximum 99 weeks of unemployment available. That will force many people to look for jobs or take unlisted handyman type jobs in the underground economy. As socialist raise taxes the underground economy becomes attractive to more people. It is a form of tax avoidance and a major part of the Greek and Italian economies. The US unemployment rate would already be falling if it were not for BP incompetence.

Economic Calendar
End of last week
Initial Claims 06/12 increased 2%… not good…but that is BP's fault but it will ramp up quickly and then stop growing. BP will pay those unemployed so BP not America will bear the cost of the oil spill.
Continuing Claims 06/5 increased 2%… not good… also BP's fault
CPI May was down -0.2% …very good
Core CPI May was up 0.1%… very good
Current Account Balance Q1 looked manipulated at $109Billion for the month… deficit is as bad as usual when Obama socialist continue to throw money to the likes of Chicago crime organizations such as ACORN
Leading Indicators May improved 0.4%… very good considering stocks were down sharply.
Philadelphia Fed Jun dropped from 21 to 8 … Not good for Philly but Philly is negligible and NYC surged earlier in the week

This Week
Jun 22 10:00 AM Existing Home Sales May
Jun 22 10:00 AM FHFA Housing Price Index Apr
Jun 23 10:00 AM New Home Sales May
Jun 23 10:30 AM Crude Inventories 06/19
Jun 23 2:15 PM FOMC Rate Decision Jun 23
Jun 24 8:30 AM Durable Orders May
Jun 24 8:30 AM Durable Orders ex Transportation May
Jun 24 8:30 AM Initial Claims 06/19
Jun 24 8:30 AM Continuing Claims 06/19
Jun 25 8:30 AM GDP - Third Estimate Q1
Jun 25 8:30 AM GDP Deflator Q1
Jun 25 9:55 AM U Michigan Sentiment - Final Jun

Market Outlook June 21, 2010

China exudes confidence in the world economy with exports up 48.5% in May and will relax the Dollar link making American products less expensive and more competitive.

The market failed to give up its gains thus far and stayed above its 50-day moving average (50DMA) further reducing worries that we might have entered a bear market. The next potential resistance area is the (100 DMA) and then the March 15 highs.

Global equities are still at the cheapest level relative to bonds since the collapse of Lehman Brothers Holdings Inc., a sign that shares in the U.S. and Europe may rally or bonds will falter. It now looks more like a stock market rally and bonds will hold their own with little inflationary danger.

Emerging markets and particularly Asian pro-shares continue to be very attractive now. China is booming again. The market has already corrected more than it did in 2004 at the end of the first year after the low point in the last recession. Then the market resumed rising sharply the rest of that year.

American socialists continue to pick up negative ratings in the polls.


World Markets

Asian markets were up sharply last night. Shanghai up 2.9%, Hong Kong up 3.1 %, India up 1.7%, S. Taiwan up 1.9%, and Japan up 2.4%.

European markets are up sharply in a range of about 1% to 1.6% this morning about half way through their day.

US pre-market futures are up 1.4% this morning. U.S. Futures are a snapshot of the moment and do not correlate with what happens by the end of the day.

A confident China, the gains in the euro, BP being forced to pay for their incompetence, and the EC holding low interest rates have turned the markets positive. Apple-like technology that exploits immature children and adults is losing its luster and consuming critically needed American Internet bandwidth destroying telecommunications growth and destroying value in the immature children's twitter stock sector.

We expect some rapid gains (market pops) interspersed with caution as investors realized the end of the world will not occur in 2011 if Americans throw all the leftists out on the streets again after the American November elections.